First Time Home Buyer Tips

When I discuss the attorney’s role in home purchases with first time home buyers, my standing joke is that if they do nothing else but listen to and absorb my first five minutes, they can sleep the rest of the way through my presentation. Rather than limit this advice to the attendees of the Valley CDC and Springfield Neighborhood Housing Services, I decided to post them on our website to share with all:

Own your closing – your home purchase!

This is likely the biggest purchase in your life thus far and you have an attorney, a realtor and a mortgage lender to help you through the process, but the bottom line is that it’s YOUR transaction.

Your Offer to Purchase contains the right to a home inspection – if you don’t like the results, you can get your money back and move on to another potential home. It also contains a provision that states if you don’t get mortgage approval from your lender, you can back out of the Contract, get your deposit back, and, again, move on to another potential property.

The “catch” is that you have to inform the Seller in writing by the specific expiration date IF you are backing out of the deal – if you miss your deadline date, you may forfeit your deposit and be liable for further damages.

If you need to extend this date, get an extension IN WRITING (folks, here I don’t really trust an email or text to be “IN WRITING.” Fax or letter.

Be aware that even once you receive a written mortgage commitment (get it in writing – verbal agreements are NOT enforceable in real estate transactions), there may be conditions and there is something called “CLEAR TO CLOSE” which – until you have it – may prevent you from buying your home. Occasionally I have had clients receive mortgage commitment, but subsequently have their loan approval rejected by failure to satisfy a condition existing after written commitment is received. If possible, extend your mortgage contingency date to cover you until receiving “CLEAR TO CLOSE.”

Try to maintain as much control over your transaction as you can – choose your realtor, choose your attorney and choose your mortgage lender. Get recommendations, contact and “interview” 3-4 potential “candidates” and choose the person who will call you back and who you can work with.

Your closing date is a target, not a date set in stone. Meaning that many mortgage lenders tend to overpromise and underperform, and the mortgage approval process at times can take longer than anticipated. Although the mortgage lenders endeavor (I love that word) to grant approval in time to honor the closing date on your Purchase and Sale Agreement, they can and sometimes do need to go beyond that date.

Finally (I got this all in within my 5 minutes, right?), the Offer to Purchase, while intended to be preliminary to a Purchase and Sales Agreement, CAN BE CONSTRUED AS A BINDING CONTRACT. Yes, signing the Offer and giving it to the Seller – once the Seller signs, you have a Contract. So please treat signing an offer as seriously as you would signing any other contract to buy something worth $100,000.00 or $200,000.00 or….

Now feel free to drift off to sleep while I continue talking about what part the real estate attorney plays in the purchase of your new home.

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2 Comments

I really like that you talked about maintaining as much control over the transaction as possible, by hiring your real estate attorney and the mortgage lender. My wife and I have wanted to move for a while now, and I think that having the help from and freedom to choose our real estate attorney would be a huge asset. Hopefully we can learn a lot from this transaction and find a real estate attorney we want to work with in the future!